Chapter 25

Due Diligence Guidelines –

Record Keeping

7. Retention Of Records

7.1 Standards

A complete set of a sponsor’s records in connection with a listing assignment should be retained in Hong Kong for at least seven years after completion or termination of the relevant transaction. [Paragraph 17.10(d) of the Code of Conduct]

7.2 Guidance

7.2.1 The sponsor should retain “a complete set of records” in connection with every listing assignment which comprises a set of records that are sufficient to demonstrate the basis on which the sponsor’s due diligence has been completed, including the basis on which opinions, assurances and conclusions are arrived at under Paragraph 17. In usual cases, the sponsor is not required to keep the underlying records of the listing applicant, working papers of experts and third parties or original documents not prepared by the sponsor. To the extent that these documents are examined to enable the sponsor to reach the opinions, assurances and conclusions that are required under Paragraph 17, it is sufficient for the sponsor to record the key aspects of the documents examined.

7.2.2 The sponsor should retain the set of records in readily accessible physical form or electronic form. The records should be stored in Hong Kong and under the control of the sponsor, which may be stored in the sponsor’s premises in Hong Kong or in off-site storage facilities. The sponsor should retain the records for a period of seven years. After the expiry of seven years the sponsor may destroy the records in the absence of any material reason for retaining them.

7.3 Recommended Steps

For material supporting agreements or documents of the listing applicant or third parties of which the sponsor has not been provided with a copy for retention in Hong Kong, the sponsor should prepare a note describing the key aspects of such agreements or documents and note the reason why it is not available to the sponsor for retention.